"Central Asia plus Japan" Dialogue: Japan-Central Asia Economic Forum
"For the Promotion of Japan-Central Asia Economic Exchanges"
26th July (Tue.), 2011
at the International Conference Room, Ministry of Foreign Affairs of JAPAN
1. Outline of Japan-Central Asia Economic Forum
On July 26, 2011, the Japan-Central Asia Economic Forum was held for the promotion of Japan-Central Asia economic exchanges by the Ministry of Foreign Affairs of Japan.
The intent to hold this Forum was expressed at the Third Foreign Ministers' Meeting in the framework of the "Central Asia plus Japan" Dialogue in August 2010 to promote trade and investment relationships with the Central Asian countries, and at the Forum four officials from Central Asian countries (on behalf of Kazakhstan, the Ambassador in Tokyo attended) and ten officials from the Japanese government and business-related persons gave reports, with some 80 people with interest in the Forum in attendance. The Forum was chaired by Mr. Toyohisa Kozuki, Special Representative in charge of Central Asia / Deputy Director-General of European Affairs Bureau, Ministry of Foreign Affairs of Japan.
2. Keynote Speech by Yutaka Banno, State Secretary for Foreign Affairs of Japan
At the beginning of the Forum, Mr. Yutaka Banno, State Secretary for Foreign Affairs of Japan, gave a keynote speech in which he indicated the importance of Central Asia to Japan in terms of 1) geopolitical significance, 2) abundant natural resources, and 3) the stabilization of Afghanistan, crackdown on drug trafficking, and tackling other urgent challenges currently facing the international community, and explained that the day's meeting was an opportunity to consider policy measures to vitalize trade and investment relationships to an even greater degree between the Central Asian region, with the importance it holds, and Japan.
He also raised three discussion points for the Forum: 1) measures for the economic development of the Central Asian region as a whole, 2) measures to make the entire Central Asian region into an attractive common market for prospective foreign investors, and 3) activities by Japanese businesses that could contribute to Central Asia's economic development, and he emphasized that an awareness of these issues reflects the intent of the "Central Asia plus Japan" Dialogue in which Japan serves as a catalyst to support the promotion of intra-regional cooperation. He further expressed his anticipation that the Forum would generate valuable hints toward the vitalization of cooperation between Japan and the Central Asian countries in economic areas going forward.
3. Main Discussions in Each Session
At the Forum, active discussions were held by the participants toward the promotion of Japan-Central Asia economic exchanges. The main points raised in the discussions in each session are as follows.
(1) 1st Session: "Central Asia plus Japan" Dialogue: toward new development
(A) Representatives from the Japanese government and related organizations presented various initiatives for promoting economic exchanges between Japan and Central Asia, such as the following, and representatives from Central Asian countries gave accolades to such efforts from Japan, which are greatly contributing to Central Asia's economic development.
 Efforts toward strengthening cooperation in the areas of infrastructure improvement, resources and nuclear power to serve as the foundation for economic activities in the Central Asian region
Specifically, explanations were given on such matters as the promotion of intra-regional cooperation through improvements to electric power, transportation, and other infrastructure; granting of financing and trade guarantees for strategic resources and manufacturing plant transactions; and support for the development of industries related to nuclear power, oil, and natural gas. In particular, there were detailed explanations from representatives of each organization on the issues of what manner of role the related Japanese government organizations—the Japan Bank for International Cooperation (JBIC), Japan International Cooperation Agency (JICA), Nippon Export and Investment Insurance (NEXI), and Japan External Trade Organization (JETRO)—have played or could play, to which the representatives from Central Asia listened receptively. Related questions were also raised by Japanese businesses on the operation of these frameworks.
 Efforts toward cultivation of industry and trade promotion in Central Asia
The specific issues raised were i) support for cultivation and diversification of industry, ii) vitalization of the private sector, ii) holding of bilateral economic forums, iv) dissemination of business information to Japanese businesses, and v) support for exports from Central Asia to Japan.
 Cooperation from Japan on improving fundamental systems for market economy operation and economic exchange
The specific matters explained included i) support for improvement of systems to facilitate the operation of the market economy, ii) strengthening of legal foundations by concluding investment treaties and other accords, and iii) measures toward improvement of the investment environment.
 Cultivation of human resources to implement economic reform in Central Asia as well as to actually conduct business with Japan, and strengthening of human networks
Specifically, concrete initiatives such as the implementation of business courses and seminars, taking on of trainees, and exchange of experts were presented, and the importance of continued follow-up on human networks was underscored. Moreover, to provide backup for the activities of Japanese businesses in Central Asia, examples were presented wherein Japanese embassies in the region are actively engaging in holding seminars and other activities.
(B) Furthermore, representatives from Japan positively assessed the efforts toward improvement of the business environments in Central Asian countries, but indicated that improvements continue to be sought in problem areas, such as scattered instances of graft and corruption, customs and immigration procedures, interpretation and application of laws, and overseas remittance of funds. Japan also pointed out the importance of maintaining and disclosing basic economic data and other information going forward.
(2) 2nd Session: Initiatives of Central Asian countries and the "Central Asia plus Japan" Dialogue
(A) Representatives from each Central Asian country explained about their respective economic and trade activities, industrial structures, recent economic growth records, and other matters. Also presented were the following measures actually being implemented to attract foreign investment: i) improvement of domestic laws concerning the activities of foreign businesses, ii) tax benefits for business activities, iii) formulation of industrial development programs, iv) establishment of special free economic zones and free tourism zones, v) measures to improve assessments by the World Bank and other international organizations, and vi) introduction of "one-stop" projects that enable registration and other procedures to be carried out via Internet websites.
(B) Representatives from each country also brought up the following areas into which they hope Japanese businesses will expand and invest.
 There were requests for investment in power plants, power grids, transportation, and other basic infrastructure improvements, in light of the continued importance of infrastructure improvements in ensuring economic development in the Central Asian region.
 Cooperation was proposed in such areas as uranium, rare earth metals, and other mineral resource development, oil-shale and other oil resource development, and water and energy resource usage and development, given the promising prospects for joint development of the abundant natural resources present in Central Asia using the experience and technology of Japanese businesses. Interest was also expressed in the introduction of alternative and renewable energy sources for which Japan holds advanced technologies.
 Investment cooperation was proposed in areas such as automobiles, medical equipment, precision instruments, building materials, and other manufacturing industries, chemical and petrochemical industries, the metallurgy industry, the pharmaceutical industry, the textile industry, and agricultural industry, with the aim of modernizing industry through transfer of technologies from Japan.
 Cooperation from Japanese businesses was requested in the area of tourism with the aim of encouraging the utilization of Central Asia's abundant tourism resources and natural environment to attract more Japanese tourists.
In response, Japanese side expressed interest in cooperation in this area going forward, especially centered on economic infrastructure improvements and resource development.
(3) 3rd Session: Activities by Japanese businesses in the areas of cooperation within the framework of the "Central Asia plus Japan" Dialogue
(A) Representatives from four Japanese businesses that are actually engaged in vigorous activities in Central Asia presented the details of such projects as uranium and rare metals development in Kazakhstan, recovery of rare metals and rare earth metals from uranium tailings, modernization of oil refineries, construction of distribution centers, construction of licorice product manufacturing plants in Tajikistan, cooperation on the creation of a gas master plan for Turkmenistan, and development of oil-shale and oil-containing minerals in Uzbekistan.
(B) Problems were raised by Japanese businesses for which improvements were requested in terms of actually conducting business in Central Asia included i) the frequent changes in laws, regulations, and other conditions on which investment is contingent, ii) the difficulty of obtaining visas, iii) the frequent transfers of personnel, and iv) the scattered instances of corruption and graft.
(C) The Japanese government expressed support in all aspects for businesses expanding into Central Asia. Japanese businesses emphasized that they aim to build long-term, stable business relationships in Central Asia and that in the future they are also eyeing business development in the entire Central Asia, and they expressed their confidence that Japanese businesses can contribute to Central Asia's economic development in each areas. Japanese businesses also pointed out the abundance of human resources in Central Asia and underscored the importance of forming personal connections with these human resources in order to expand business in the area.
In view of the fact that suggestions were made toward the encouragement of Japan-Central Asia economic exchange through the discussions in each session, these suggestions will be incorporated into the discussions at the Senior Officials Meeting (SOM) of the "Central Asia plus Japan" Dialogue to be held this fall, as well as the Fourth Foreign Ministers' Meeting of the "Central Asia plus Japan" Dialogue to be held next year in Tokyo.
(1) Measures for the economic development of the entire Central Asian region
Japan is coordinating with Central Asia Regional Economic Cooperation (CAREC) and other international organizations to contribute to the economic development of the entire Central Asian region through improvements to north-south and east-west transportation corridors, power plants and grids, and others, and going forward it will consider the possibility of cooperation using ODA and other tools, especially including distribution routes to the south to contribute to the stability of Afghanistan and improvements to energy and infrastructure that will benefit surrounding countries as well. In relation to this, representatives from Central Asia requested continued cooperation through the framework of ODA, expanded investment from Japan, and support for further encouragement of human exchange.
At present, projects are being advanced by Japanese businesses that will lead directly to strengthened coordination with the Central Asian region's external economic zones, and the successful implementation of such projects and Japanese businesses' striving for further subsequent advancement of such cooperation will also be effective in promoting the development of Central Asia as a region.
(2) Measures to make the entire Central Asian region into an attractive common market for prospective foreign investors
The diverse efforts being made by each Central Asian country to attract foreign investment in light of their respective states of affairs were evaluated positively, but at the same time it was pointed out that there still remain issues that should be improved.
For Japan's part, it will continue its efforts to improve the business environment in Central Asia through such initiatives as strengthening the legal foundations by concluding investment treaties and other accords, supporting Japanese businesses through Japanese embassies in the region, and implementing working groups. Moreover, the necessity of raising the transparency, fairness, and investment predictability with regard to business activities through cooperation on improvement of systems was pointed out, along with the need to boost the capabilities of the private sector in Central Asian countries that will take on such business.
Suggestions given for luring additional investment to Central Asia included 1) setting up one-stop services for registration procedures and other administrative services; 2) maintenance and disclosure of information on bank and corporate finances; 3) improvement of power, gas, water, and other public infrastructure; and 4) organization of business matching services through which trustworthy business partners can be secured.
It was further pointed out that, in order to deepen economic ties between Japan and Central Asia further, it is also important for the Central Asian countries to understand the national character of the Japanese people and their cultural background, and that special consideration needs to be given to 1) predictability, 2) promise-keeping, and 3) a long-term perspective.
The Central Asian region has the potential to develop as a consumer market in the future as well, but in order to draw out such potential it will be important to maintain and disclose basic economic data and other information going forward.
(3) Activities by Japanese businesses that could contribute to Central Asia's economic development
Through the discussions on the day of the Forum, it was confirmed that Japanese businesses are highly motivated to make forays into Central Asia and do business there. Regarding the areas of future cooperation about which there were suggestions from each of the Central Asian countries, each business will also consider the possibility of business expansion into the region going forward, and the Japanese government and related government organizations will consider possibilities for cooperation, including the use of ODA and other tools.
Japanese businesses pointed out the advantages of promoting one-stop services in business fields as well, since it will enable more organic business development through the outsourcing of a round of processes from project feasibility assessment to financing, design, technology licensing, construction, and maintenance en bloc to Japanese businesses.
The Japanese government reaffirmed its intent to proactively support the expansion of Japanese businesses into the Central Asian region and their business activities there, by providing businesses support through Japanese embassies in the region and by holding seminars and other events that make use of the facilities in Japanese embassies and elsewhere.
The participants valued the vigorous discussions that took place during the Forum and confirmed the significance of continuing such initiatives in the future.
Chairperson of Japan-Central Asia Economic Forum:
Toyohisa Kozuki, Special Representative in charge of Central Asia /
Deputy Director-General of European Affairs Bureau,
Ministry of Foreign Affairs of Japan
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